Reading were 2 - 0 down at HT after goals from Robbie Fowler and Riise.
It was 3 - 0 soon after half time with all Liverpool goals coming in a 6 minute spell either side of the break.
Andre Bikey pulled one back but Liverpool made it 4 - 1 from Peter Crouch.
Then Reading scored twice with goals from Lita and Long in the space of 4 mins.
That ended the scoring with Liverpool going onto round 4 and a trip to Birmingham City.
Fourth Round Draw:
Birmingham v Liverpool
Chelsea v Aston Villa
Chesterfield v Charlton
Everton v Arsenal
Notts County v Wycombe
Southend v Manchester United
Tottenham v Port Vale
Watford v Newcastle